Many commercial business owners have some misconceptions about what is and isn’t necessary when it comes to their commercial insurance coverage. In fact, a large percentage of business owners are lacking in at least one type of property or liability coverage. If an event were to occur such as a natural disaster, bodily injury on the premises, theft or vandalism or data breach, it could be financially devastating for the business. The number one reason businesses fail is because of cash flow problems, yet many costly losses can be avoided with proper insurance coverage.
Commercial business owners who are often too busy running their organization to set aside time to focus on their insurance needs, so keeping track of multiple commercial insurance policies is not ideal. However, a business owners policy (BOP) takes the guesswork out of commercial insurance coverage and allows agents to work with clients to create a multiline insurance package that covers all of their needs. A BOP insurance package combines a variety of different policies to provide comprehensive coverage for commercial business clients.
Here are some of the necessary coverages for commercial business owners that can be included in a business owners policy:
- Commercial General Liability (CGL): A basic CGL policy is essential, and it protects the business against losses resulting from common litigation risks such as bodily injury or property damage on the business premises, bodily injury or property damage due to business operations, medical payments, libel, slander and copyright infringement.
- Commercial Property: A BOP insurance package will also typically include commercial property coverage, which protects against losses resulting from accidental damage to the property, not including damage from floods or earthquakes.
- Flood Insurance: One in four businesses are unable to recover following a natural disaster due to lack of financial resources. With flooding being the number one natural weather hazard in the United States, commercial flood insurance is a necessity for business owners.
- Business Interruption (BI): Property and liability insurance policies cover financial losses, but do not take into account lost income during recovery from an event. BI insurance covers the actual loss of business income as well as certain fixed expenses during the necessary suspension of business operations following direct physical loss, damage or destruction to the business’s property as the result of a covered peril.
- Crime and Fidelity Insurance: While property insurance does cover theft and vandalism done by outside parties, additional coverage is needed for money and securities losses that are a result of owner, executive or employee action.
- Cyber Liability: Any business that stores or sends data electronically is at risk of a data breach. The cost of a data breach is expected to exceed $150 million per event by the year 2020; a cost that not many businesses can afford to shoulder.
About Wilmington Insurance Agency
Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.